CXM! What the Heck is That?

In his recent very readable article ‘iCXM Comes of Age – Using AI to Know, Engage, and Server Your Customers Better’, CustomerThink.com founder and chief editor Bob Thompson explored how Artificial Intelligence can improve Customer Experience Management – and with extending CXM to iCXM created a new acronym, jokingly noting that the industry is running short on buzzwords.

The opportunities that Bob identifies are

Knowing your customer

Engaging your customer

Serving your customer

While this is all true, I contend that none of this is about customer experience management, simply because customer experiences are living in the perception of the customer, and hence are solely managed by the customer, not by any company. I wrote about it earlier in my article There is no customer experience without customer engagement.

According to Wikipedia, customer experience ‘is the product of an interaction between an organization and a customer over the duration of their relationship. This interaction is made up of three parts: the customer journey, the brand touchpoints the customer interacts with, and the environments the customer experiences … ‘. Therefore customer experience ‘implies customer involvement at different levels – such as rational, emotional, sensorial, physical, and spiritual. Customers respond diversely to direct and indirect contact with a company.’ Lastly, customer experience ‘can be defined as the internal and personal responses of the customers …”.

A company, supported by the software it uses, can engage customers in a way that these customers have a positive – or negative – experience.

What now is customer experience management?

Friend and CRM Godfather Paul Greenberg, in a seminal article clarified on the definitions of Customer Relationship Management, Customer Engagement Management, and Customer Experience Management, writing that ‘CXM is a business science that has the purpose of determining the strategy and programs that can make the customer feel good enough about the company to want to continue to do business with the company.’

Techtarget defines it as ‘the collection of processes a company uses to track, oversee, and organize every interaction between a customer and the organization throughout the customer lifecycle. The goal of [Customer Experience Management] is to optimize interactions from the customer’s perspective and foster customer loyalty. To manage the customer experience, a company needs to create a strategy that encompasses all customer interactions.”

There we are.

Strategy.

Not a system. Nor a software category.

So, be wary if a vendor comes to visit you and tells you about their great CXM software. And, yes, this includes big names like Oracle, or Adobe. And then there is a raft of smaller solutions that drives on the CXM label. By the looks of it Microsoft, Salesforce, and SAP got it and are more about ‘Engagement’, which is a prerequisite for experiences.

So, what are the cornerstones of CXM as a strategy?

I do see three:

An outside-in view that defines the success of the company as a result of customer success, or in other words the ability of giving the customers what they need and want.

Processes that are designed to deliver customer success with minimal friction.

Data, lots of it, to build individual customer profiles and to be able to engage with them in relevant conversations – using the right message, at the right time, using the right channel. And ultimately being able to offer the right products and services.

Software supports all these three cornerstones. But, what this software does is enabling engagement, either directly, as in marketing, sales, service, or indirectly, as in analytics, operations systems, content management systems, etc.

Until we get a software system that is intelligent enough to determine a customer’s mood and circumstances every time in real time and that is capable of reacting accordingly and adapting its part of the conversation correspondingly, we will not have Customer Experience Management software, or a category of this software.

Thomas helps organisations of different industries and sizes to unlock their potential through digital transformation initiatives using a Think Big - Act Small approach. He is a long standing CRM practitioner, covering sales, marketing, service, collaboration, customer engagement and -experience. Coming from the technology side Thomas has the ability to translate business needs into technology solutions that add value. In his successful leadership positions and consulting engagements he has initiated, designed and implemented transformational change and delivered mission critical systems.

8 COMMENTS

Thoughtful blog…but, where are the people? Seems to me somewhere in the middle of all this acronym soup is a relationship managed (and often fronted) by real people serving real people. I fully appreciate the glamor of mechanized service driven by clever technology and smart systems. I also recall the frustration of the vending machine that took my dollar and failed to give me my soft drink at a rest stop in the middle of no where. The best service delivering machine cannot give me empathy when I have an issue, create ingenuity on the spot, comment on my cute granddaughter when making a purchase, or laugh when I crack a corny one-liner! CRM has an “R” in the middle of the acronym.

As a front-line bookstore supervisor in a very small satellite campus bookstore, I treasure every customer/Guest that visits or calls our location. To me, this means that they prefer the human touch when seeking help and information about their textbooks, materials, and the college in general. Even though our campus has a Website offering all this and more, there are some things that can only be handled best by good old human contact – and I am available (as well as my coworkers at our other two campus locations) to assist and provide service exceeding my Guests’ expectations. Until Watson and other AI progrmas and entities become self-aware, human contact will be the best alternative for consumers.

‘CXM is a business science that has the purpose of determining the strategy and programs that can make the customer feel good enough about the company to want to continue to do business with the company.’? The underlying culture, strategy and programs, initiatives, and processes for building, managing, and sustaining CX are pretty well understood. So is the need to build relationships, foster stakeholder communication, and deliver tangible and emotional value. But, a business science? In enterprises with successful CX delivery, what can often be found is that this has been situationally achieved, with a combination of art, craft and science. From my perspective, the Wikipedia definition of CXM is closer to real-world. Using a ‘science’ label marginalizes what CX really means, and is a reflection of why CRM, too often viewed as a science, is old news.

Hi Chip, thanks for reading and commenting. And: You are right. Nothing will work without people. In my 3 cornerstones they are ‘hidden’ behind the first 2 bullet points. My main concern was more about the acronym soup.

Hi Lisa, human contact will stay a very good alternative for consumers, even if the Watsons of this world mature. Especially when it comes to libraries. But then sometimes people just want an in-and-out experience. Look at groceries: I personally just would like to get over it – no time in queues etc – but I’d still like to be able to touch the fresh stuff. As I just replied to Chip, my post was more coming from the acronym soup. I ‘hid’ the people in the first two bullet points.

Hi Michael, CXM surely needs to be operationalised when put into a company, so I will not disagree with the art and craft aspects. (Business) Economics is pretty well understood, too, but then it is still a science.

I, too, like the Wikipedia text; however, Wikipedia itself asks for caution with this particular article. Gartner Group has another definition: “the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy.” – although I’d argue that they rather define Customer Engagement Management with it.

The main problem to me is that there are too many definitions and perceptions floating around, and that vendors are trying to create a software category for something that isn’t. As a side note: There is not even an agreement on what acronym to use 😉

I’d contradict to the marginalization, especially when arguing with a CRM angle. CRM got marginalized (or became ‘old news’) early on by the vendors by successfully and firmly putting it into the technology corner, with technology without strategy delivering predictable (non-)results.

This now causes the need for new and poorly understood 3-letter-acronyms, repeating the same thing all over again. It might just be the nature of business.

Asked about the difference between CRM and CEM a vendor representative just yesterday told me that in his book CRM with its intelligence is the foundation and CEM covers the tactical aspects of engagement. I think it is an interesting take. In an adaptation of an article I wrote early last year I currently would delineate Customer Relationship Management, Customer Engagement Management, and Customer Experience Management as follows:

CRM’s role is to manage the business operations related to the customer. Its analysis capabilities turn data into actionable insights. This makes CRM the foundation of good customer engagement across communications channels and touch points, which results in customer experiences. Customer experiences often result in engagements by the customer. Both, customer engagements (by the company), and engagements by the customer, feed back data to CRM, creating a virtuous circle.

Agree that the heavy focus on technology helped to pretty much sunset the growth of CRM (similar to how justification of staff cutbacks did with re-engineering), and also that CRM is largely about customer operation and process management.

For sure, CXM starts with a solid strategy and changes in the corporate culture. Technology is there to help a company’s employees be more customer-centric and it really can do this by automating certain tasks or delivering analytical insights. Today, vendors promote dedicated CXM tools. However, CXM can be mostly managed using the company’s CRM system with just some tweaks, like those described in this CXM guide for beginners: http://www.customerservicemanager.com/how-to-get-started-with-customer-experience-management.
To support all the three cornerstones mentioned above, software, be it a CRM or CXM system, should have the following functions: contact management, marketing automation, ‘voice of the customer’ programs, integration with customer support applications, customizable reports, and custom CRM workflows. All this can be established on the basis of a CRM system.

Mastery of Customer Experience at your fingertips with CX University’s Online Courses and eModules. Earn your certification as a Customer Experience Specialist (CXS)™ or unite your organization in online and on-the-go training that puts the customer at the center of business.